RACINE — The sale of Regency Mall is complete, with the new owners promising a steady, systematic revival of the mall — and a broad look at what actions would improve that entire commercial area.
Hull Property Group of Augusta, Ga., closed Friday on the purchase of Regency Mall for $9.5 million. It was part of a package deal in which Hull also bought two other malls, in Asheboro, N.C., and Dalton, Ga., from CBL & Associates for a total of $32.25 million.
Regency Mall, which opened in 1981, has about 700,000 enclosed square feet on 76 acres and is what Hull Managing Owner Jim Hull calls a “failed mall.”
“We believe that it is important for a community to have a vibrant retail corridor and an aesthetically pleasing enclosed mall,” Hull stated. “The Regency Mall is not reaching its potential, and our first step is to work together with community leaders and surrounding property owners to determine how the main Racine retail corridor can offer an improved shopping experience.
“There is a lot of work ahead, but we are long-term owners and want to invest the time to get to know the community and understand the best path forward,” Hull continued. “We have been successful in revitalizing similar properties by working closely with local leadership and hope we can achieve similar results here in Racine.”
HPG has 40 years of experience in retail real estate and a history of acquiring and repositioning underperforming enclosed malls and shopping centers in small- to mid-size markets. HPG owns 28 regionally enclosed malls, of which 5 are under renovation at this time. HPG also owns 15 shopping centers.
“This is our briar patch,” remarked John Mulherin, Hull vice president for government relations, a reference to the Georgia folktale about Bre’r Rabbit.
People should start to see some interior and exterior upgrades and enhancements to Regency Mall by late first quarter 2017, Hull said. However, before those could begin, he described a thorough planning and consensus-building process his firm will lead for the entire commercial Highway 11-Highway 31 “node.”
In that whole commercial area — which includes the partly vacant small retail center directly south of Regency on Highway 11, and High Ridge Centre, which now only has Home Depot and Kmart, “the mall is one of the properties that most needs to be addressed,” Hull said.
“If it would continue to degrade,” Mulherin said, “it would degrade the area around it. … (The mall) can be a millstone around the neck, or the high tide that lifts all boats.”
Hull said he has already talked with some of the surrounding property owners and will continue those discussions in an attempt to gain consensus on what the area should “look and feel” like.
“We are encouraged by our conversation with local leaders and property owners in the retail corridor surrounding the mall,” Mulherin said.
“To the extent that we have a property owner that doesn’t care, or has a use contrary to the (consensus) look and feel, we would want to try to gain control of those,” Hull said.
“We have to think about maybe a business improvement district,” he said, “and create a sense of place.” In a BID, property owners agree to pay into a fund specifically used to enhance the BID area; Downtown Racine, for example, has a BID.
Making sure the mall’s standalone Target store thrives is critical, Hull said. “Everything we do should complement and help the Target.”
As for upgrades to the mall itself, Hull said, “We’ll be ready to move forward as soon as we can build consensus” in the area.
HPG has a history of making significant investments to upgrade its acquisitions, both inside and out. As examples, it plowed $3.6 million into Florence Mall in Florence, Ala., which HPG bought in 2002; and $6.2 million into Danville Mall in Danville, Va., which HPG bought in 2012.
The company has a design group that will consider changes to Regency Mall’s entrances, lighting, ceiling heights, vacancies and so on, Hull said, “to create an aesthetic that is pleasing.”
“The key to all of these properties is the look and feel,” Mulherin said. “We have got to orchestrate a look and feel that make people want to come in and shop.”
“We know the community wants a lively mall with more shopping and dining options and we share that vision,” stated HPG Vice President for Leasing Ky Widener. “We have several tenants already in the mall that will contribute to a strong lineup of retail and restaurants, but to attract more stores we will need to improve the appeal of the property and demonstrate the potential for long-term success.”
Hull’s target demographic — the only one he cares about, he said — is girls and women of all ages.
HPG is is very picky about what retailers it keeps and will boot gold buyers and poor retailers as their leases expire, Hull said. They prefer national retailers, and only those that will generate a certain minimum amount in sales per square foot per year.
Another HPG policy is to create long, open lines of sight in its malls to make women feel safe, Hull said. That means it will get rid of all kiosks at Regency as their leases end.
Yet another HPG technique is to replace vacant interior tenant spaces with attractive, permanent walls — instead of leaving the metal, jail-like gates that create impressions of hopelessness.
Hull described his company’s management model as centralized and “very programmatic, very plodding, very patient.”
Looking at the entire area from the dense retail district of Highway 50 northward, Hull said: “We may not be dominant, but we can be relevant.”